Stop! Read This Before You Seller Finance Your Property — 6 Costly Mistakes To Avoid
4:49 watch · September 20, 2026 · With Dawn Bearden, Moxxie Asset Group
The Six Pitfalls to Avoid Before You Close
- ✓ Pull your borrower’s credit — The most common and most costly omission. Credit drives roughly 40% of what your note is worth later.
- ✓ Use an RMLO — A residential mortgage loan originator pulls credit and verifies income, confirming your borrower can actually repay.
- ✓ Use a third-party servicer — They collect payments, track taxes and insurance, and build the clean paper trail you’ll need in a dispute.
- ✓ Get a real down payment — 10–20% shows commitment and gives you an equity cushion if something goes wrong.
- ✓ Get a lender’s title policy — Not just an owner’s policy. A lender’s policy protects you in your new role as the lender.
- ✓ Be named on the insurance — List yourself as lender on the homeowner’s policy so you’re notified and protected after a fire, storm, or flood.
- ✓ Structure for resale value — Owner-occupied single-family homes and fully amortized loans hold their value far better than the alternatives.
Prefer to read? Considering Selling Your Property Using Seller Financing? Avoid These 6 Costly Mistakes
Full Video Transcript
Moxxie Is More Than a Note Buyer
Hi, I’m Dawn, the Senior Seller Finance Note Advisor with Moxxie Asset Group. I want to clear something up today.
A lot of people think of us here at Moxxie as just a company that buys owner-financed mortgage notes, but honestly, that’s only half the story.
We are also seller financing advisors, and that means we help people before they ever create a note, not just after, when it’s time to sell.
We Are a Seller Financing Educational Company
At the core of everything we do here at Moxxie, we are a seller financing educational company. Our goal is to keep note creators, note holders, and note sellers genuinely well informed so you can make confident, informed decisions at every single step of the seller finance process.
That applies whether you’re just thinking about seller financing to sell a property, you’re years into holding a note, you just want to know your note’s value, or you’re ready to sell your private mortgage note now.
How You Set Up the Note Determines Everything
How you set up a note in the beginning, before you close with your borrower, determines everything down the road with your note: how safe your payments are, and how much that note would be worth if you ever did want to sell it.
We’ve seen the same avoidable mistakes come up again and again, so let’s walk through the most common ones we see.
Pitfall 1: Not Pulling Credit on Your Borrower
Not pulling your borrower’s credit is one of the most common mistakes, and one of the most costly. We already talked about this in a previous video.
Often, note creators simply don’t know how to pull credit, or who can do it for them.
Pitfall 2: Not Using an RMLO
Right alongside the no-credit-pulled issue is not using an RMLO — a residential mortgage loan originator — before and during closing on your owner-financed mortgage note.
An RMLO can actually pull credit on your potential buyer and verify their income, to find out if your borrower can actually afford to pay this note back to you.
Pitfall 3: Not Using a Third-Party Servicer
Not using a third-party note servicer — a company that collects the note payments for you, tracks taxes and insurance, and keeps clean records for you.
Without one, you’re stuck manually chasing payments yourself. And if there’s ever a dispute, you don’t have a clean, professional paper trail to fall back on.
Pitfall 4: Not Enough Down Payment
A strong down payment — 10, 15, 20 percent — protects you. It shows real commitment from your borrower, and it gives you real equity cushion in case something ever goes wrong.
Pitfall 5: You Need a Lender’s Title Policy
Here’s one people often don’t even know exists. When you seller finance, you need a lender’s title policy, not just an owner’s title policy. They’re different.
A lender’s policy protects you as the note holder, specifically in your new role as lender, the same way it would protect a bank.
Pitfall 6: Be Listed on the Homeowner’s Insurance
Make sure you’re listed on the homeowner’s policy as the lender. If there’s ever a fire, a storm, a flood, any kind of damage, you want to be notified and protected too, not just the homeowner.
Which Notes Hold the Highest Resale Value
Beyond avoiding mistakes, we also advise on which notes tend to hold the highest resale value down the road.
Generally, an owner-occupied single-family home is going to hold up better than other property types. Fully amortized loans, where the balance steadily pays down over time, are worth more than interest-only loans, where the balance never really goes down.
Get a Free, No-Obligation Note Review
So whether you’re just starting to think about selling your property using seller financing, or you already have a note and want a second opinion on how it was set up or what it’s worth, this is exactly what we’re here for.
And of course, if you ever want to know what your existing note is worth, we offer a free, no-obligation note review. You can fill out our free note review on our website, or reach out anytime by calling us at 954-466-7111.
I hope this video helps you understand that Moxxie Asset Group not only buys seller-financed mortgage notes, but we also help you structure these notes before you create them, to ensure your note is high quality and can sell for premium pricing when and if you ever want to sell it. Thank you.
Want to Know What Your Note Is Actually Worth?
Send us your note details and our team will walk you through the numbers — no obligation, no pressure. When all documents are received and title is clear, most closings run 3–5 weeks. Have your promissory note and your mortgage or deed of trust (depending on your state) handy.
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